Wednesday, August 11, 2010

Picture Still Bullish In Spite Of Selloff

While it is possible that the 8/9 high completed the double zigzag, or a single zigzag with an ending diagonal triangle, the better fit is that the current selloff is wave (c) of [x] of the double zigzag with support around 1070. Thereafter wave [y] should commence to take the SP500 up to 1138 to 1180. The higher target is less likely, but the targets are easy to see in the chart and can be calculated by adding 110 points, wave [w], to 1070 which gives 1180, or 0.618 x 110 = 68 to 1070 which gives 1138. I suspect the January high around 1150 will be about all the market can muster at this point and that will be where I will be looking to sell if it can get there without completely breaking down.

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